The White House last night lambasted Herta Däubler-Gmelin, the German justice minister, for describing President Bush's Iraq policy as comparable to the methods of Adolf Hitler.
"Bush wants to divert attention from domestic difficulties," she said. "That is a popular method. Hitler has done that before.'
Ms Däubler-Gmelin's comments are the latest attempt by Chancellor Gerhard Schröder's Social Democrats to pick up votes three days before the most closely fought German election in decades.
She played to the anti-war sentiment of many voters but threatened the worst breakdown in relations between Berlin and Washington since the Second World War.
Using unusually blunt language Ari Fleischer, Mr Bush's spokesman, said: "The relations between the people of the United States and the people of Germany are very important to the American people.
"But this statement by the justice minister is outrageous and it is inexplicable." The SPD was accused by the centre-Right of rampant "anti-Americanism" and risking Berlin's relationship with Washington to pick up votes.
The campaign has turned increasingly ugly with parties trading insults over Iraq, immigration policy and how to deal with Islamic extremists resident in Germany.
Ms Däubler-Gmelin also claimed in an interview with the Schwabisches Tagblatt newspaper that if insider trading laws had been in force in the 1980s when President Bush was involved in the oil business "then Bush would be in prison today".
Later, in a bid to soften her remarks, she said: "I did not compare the persons Bush and Hitler, but the methods."
As the opposition called for her resignation she issued a statement saying: "It is erroneous and inflammatory to imply that I compared a man who was democratically elected, the American President George W Bush, and the Nazi era.
"I have always said to what point such a comparison would be unacceptable and false. That was, by the way, implicit in this confused article that some are now using for political ends."
The comments were the most outspoken by any SPD politician since Mr Schröder ruled out German participation in any US-led military action to topple Saddam Hussein, and said that as Chancellor he would never provide money for such a campaign.
Edmund Stoiber's centre-Right alliance of Christian Democrats (CDU) and the Christian Social Union (CSU) claim that Mr Schröder's policy risks isolating Germany.
Mr Stoiber said: "The anti-American attitude of Saddam is only surpassed by Schröder."
Thomas Goppel, the CSU general secretary said the remarks "show how the SPD really view our American allies". He added: "There is a strategy behind this. The SPD tries to give the impression that the real enemy is Bush and not Saddam. That is irresponsible and demagogic."
One of America's most senior foreign policy figures said that Mr Schröder's comments in the New York Times went beyond electioneering and had caused lasting damage to US-German relations.
Mr Schröder criticised the US vice-president Dick Cheney and said Germany would not back action against Iraq even if it were authorised by the UN.
Dan Coats, the US ambassador to Berlin, registered formal protests and said that relations between the two countries had been badly affected.
Nonetheless, fearing that the SPD's anti-American push might win votes for the SPD, Mr Stoiber opposed the idea of America going it alone, saying the solution should by found through UN pressure.
"It is about destroying weapons of mass destruction not toppling a dictator. There should not be a solo run by the Americans but also not a German solo run." However, Mr Stoiber said that if elected he would not permit the US to use its German bases to attack Iraq if it acts unilaterally.
Since Mr Schröder hardened his opposition to an Iraq war, he has wiped out a seven-point poll deficit and is a whisker ahead of Mr Stoiber. The policy appeals to Germans appalled at the prospect of their country returning to war.